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Tuesday, January 08, 2008

I saw a great example of scalability the other day and havent been able to shake it. Its also know as "Colonization" in the fantastic (and dense) book The Plentitude. Scalability is slightly different than categorization, in that its not necessarily a process from an unowned or new to the world category. Categorization takes a category and advances it (i.e. Football --> Pay to watch football --> Watch on tV for free --> NFL network gets paid to show games -->Pay to play virtual football on your xbox 360). I'm thinking of scalability pertains to a particular product and brand within a category. Slightly different...

So Gizmodo a personal favorite site for me with all its geeky tech stuff and being an amateur photog, i have been following Oakley's forays into the digital realm. Oakley has created a RED camera, which while it costs $17500, is comparable to the high-end cameras found in use with most of hollywood's epic motion pictures. Oakley has essentially created a consumer-accessible version of a once-unobtainable piece of technology. Much like the digital camera and high speed internets were equalizer, this should shake up the game a bit. Consumers (Rich ones) could be high-end. Their site states "The idea behind the RED camera system is simple. Design and build a high performance digital cine camera with the quality of 35mm film and convenience of pure digital. RED delivers unmatched image quality with no recording system limitations." Scalability stretches a brand through its products, creating multiple emotional equities.

While Oakley isn't known for electronics, its an interesting space for them to play coming in through technology and the advantages of lens. They also throw in their ruggedability and they have an interesting disruptor in the market. Even better is their scaling of the product, with a high-end production model as well as a lower consumer version. While almost every company has a skew, an ability to segment consumers behaviors through product offerings can allow them to maximize their revenue without overlapping consumer segments. Nothing new there, except most companies have too many sku's and overdo it. TVs are a prime example, with so little differences hardly the retail salesman can differentiate. Oakley makes it simple and that makes it accessible. Not to mention stylized and sleek. Function and form, are a good combo, just ask Apple.

Scalability also impacts brand value on a larger scale. A virtual product can impact the physical one. Look at what Madden Football has done for football. There are now generations growing up that educate themselves solely through a videogame, without stepping onto a field. Not to mention how this grows awareness and popularity of a sport, often in football absent areas. In recent times technology has created more economies and added more value to products, than real life counterparts.A recent NYTimes article, looks at the impact of Magna Carta, and its impact on the currency of information. A replica, has increased in price despite the face that information is now free and abundent. Yet most copies are virtual, and they only drove up the price of the real object. Real value can come from real or virtual impacts. Good innovators create products that are scalable out of the box. Ask yourself next time you are in a brand or product creation, are you adding a value that can be applicable to both consumer and business?

So scalability can work both ways. It can be used to segment consumers, and create different types of products (real, virtual or a mix) within a market. And it can be used to add value to a brand or, even larger such as product's market.

Scalability is a necessity when innovating, as it helps brands stretch in conjunction with products that can establish different types of equities. Products can build functional equities, allowing a brand to stretch emotionally. When used in conjunction a brand can be "stretched" or scaled.